As reported last week, the European Commission is seeking public comments on Samsung's proposed commitment to limit its ability to seek injunctions for the infringement of its Mobile SEPs. (Samsung, like Motorola Mobility, is the subject of an ongoing investigation into whether seeking injunctions for the infringement of FRAND-encumbered SEPs constitutes an abuse of market dominance under E.U.) Here is a link to Samsung's proposed commitment, and here is a link to the E.C.'s press release. You may want to read the documents in their entirety, but here are the most relevant parts excerpted from Samsung's proposed commitment:
A. COMMITMENTS WITH REGARD TO SEEKING INJUNCTIVE RELIEF
1. Samsung Electronics commits not to file a claim seeking Injunctive Relief before any court or tribunal in the EEA for infringement of Samsung Electronics’ Mobile SEPs against any Potential Licensee who, by signing and returning Samsung Electronics’ Invitation to Negotiate . . . within thirty (30) days of receipt, agrees to, and thereafter complies with, the framework for determining FRAND terms for a license for Mobile SEPs for Mobile Devices set out in this Clause 1 (“Licensing Framework”) as the exclusive means for determining FRAND terms of a license agreement for Mobile SEPs for Mobile Devices covering, to the extent not already licensed, (i) Samsung Electronics’ Mobile SEPs (“Unilateral License”); or, if either Party seeks Reciprocity, (ii) both Samsung Electronics’ Mobile SEPs and certain of the Potential Licensee’s Mobile SEPs as covered by Reciprocity (“Cross-License”):a. Samsung Electronics and the Potential Licensee (each a “Party”, collectively the “Parties”) shall negotiate for a period of twelve (12) months starting on the Commencement Date (“Mandatory Negotiation Period”) on FRAND terms with a view to agreeing a Unilateral License or a Cross-License, as specified above . . . .b. In the event that neither the FRAND terms for a Mobile SEPs license nor an alternative procedure for determining FRAND terms for a Mobile SEPs license has been agreed by the Parties during the Mandatory Negotiation Period, the Parties shall submit the matter to arbitration or to court adjudication in order to determine the FRAND terms of a Unilateral License or. as applicable, a Cross-License, in accordance with Section B of these Commitments (the “Third-Party Determination of FRAND Terms”). . . .2. Samsung Electronics is relieved from its obligations under these Commitments, and may, in particular, file a claim for Injunctive Relief before any court or tribunal in the EEA for infringement of Samsung Electronics’ Mobile SEPs against the Potential Licensee, without so doing constituting a breach of these Commitments, if:
a. the Potential Licensee fails to agree or comply with the provisions of the Licensing Framework;
b. the Potential Licensee is facing Imminent Default, or, where a particular Potential Licensee legal entity is facing Imminent Default, with respect to that legal entity;
c. the Potential Licensee has filed and maintains, or files a claim for Injunctive Relief before any court or tribunal in the EEA against Samsung Electronics or a customer of Samsung Electronics for a Mobile Device or component thereof that is made, marketed, distributed or sold by Samsung Electronics, based on infringement of any of the Potential Licensee’s Mobile SEPs, and Samsung Electronics, subsequent to the Potential Licensee’s claim for Injunctive Relief, offers to be bound by the Licensing Framework applied to it as potential licensee of certain of the Potential Licensee’s Mobile SEPs, by signing and delivering to the Potential Licensee an Annex A Invitation to Negotiate for, as relevant, a Unilateral or a Cross-Licence and/or, as the case may be, to the extent the Potential Licensee’s claim for Injunctive Relief is based on any Mobile SEPs which are not covered by the Annex A Invitation to Negotiate, an Annex B Invitation to Negotiate, which, if accepted, will lead to a separate Third Party Determination of FRAND Terms, unless the Parties otherwise agree;
d. a Unilateral License or a Cross-License is terminated under the circumstances provided for in Clause 3.f.
3. Nothing herein shall . . .
f. preclude Samsung Electronics from terminating a Unilateral License or a Cross-License concluded in the context of the Licensing Framework in the event the Potential Licensee files a claim for Injunctive Relief before any court or tribunal in the EEA against Samsung Electronics based on alleged infringement of any of the Potential Licensee’s Mobile SEPs, where Samsung Electronics has offered or offers to be bound by the same process as set out in the Licensing Framework applied to it as licensee of such Mobile SEPs by signing and delivering the Annex B Invitation to Negotiate.
4. Nothing in these Commitments shall restrict the ability of the Potential Licensee, in the case of a Unilateral License, or either Party, in the case of a Cross-License, from challenging the validity, essentiality or infringement of the other Party’s Mobile SEPs outside the context of the Third-Party Determination of FRAND Terms.B. THIRD-PARTY DETERMINATION OF FRAND TERMS
5. In the event that neither the FRAND terms for a license nor an alternative procedure for determining FRAND terms for a license has been agreed by the Parties during the Mandatory Negotiation Period, the Parties shall, within sixty (60) days of the end of the Mandatory Negotiation Period, choose whether to submit the matter to arbitration or to court adjudication in order to determine the FRAND terms of a Unilateral License or, as applicable, a Cross-License. If the Parties within this sixty (60) day period mutually agree to submit the matter for arbitration of the FRAND terms, the Parties shall commence Third-Party Determination of FRAND Terms by way of arbitration, in accordance with the arbitration procedure set out in Clause 9. If the Parties within this sixty (60) day period mutually agree to submit the matter to court adjudication of the FRAND terms, the Parties shall commence Third-Party Determination of FRAND Terms by way of court adjudication, in accordance with the court adjudication procedure set out in Clauses 10 and 11.
6. If the Parties have failed to reach agreement on whether to submit the Third-Party Determination of FRAND Terms for arbitration or to court adjudication within this sixty (60) day period, the Parties shall commence Third-Party Determination of FRAND Terms by way of arbitration, in accordance with the arbitration procedure set out in Clause 9. . . .Court Adjudication:
10. The venue for the court adjudication procedure will be the Patents Court, High Court of England and Wales (or any successor court), or the UPC as is agreed between the Parties (the “Court”). . .D. DURATION
14. These Commitments will be applicable for five years from the Effective Date and all obligations arising from these Commitments will terminate upon expiration of this five-year period. Any license agreement concluded in the context of the Licensing Framework will remain valid for the duration provided by its terms. . . .E. COMMITMENTS WITH REGARD TO NON-CIRCUMVENTION . . .
16. Nothing shall prevent Samsung Electronics from selling or assigning any of its Mobile SEPs to any Third Party, provided that:
a. the Third Party agrees to become a successor to Samsung Electronics' FRAND Commitments in relation to such Mobile SEPs, and
b. where Samsung Electronics retains any financial interest in the revenues that are or could be generated by its Mobile SEPs being sold or assigned following this sale or assignment, Samsung Electronics shall ensure that the Third Party to whom Samsung Electronics sells or assigns such Mobile SEPs agrees to comply with these Commitments, in relation to the Mobile SEPs so sold or assigned, until these Commitments have expired.
On the blogs, some of the commentators have objected to A.3.f, which allows Samsung to terminate a unilateral license or cross-license if the licensee seeks injunctive relief against Samsung for the infringement of Mobile SEPs and doesn't agree to be bound by the same procedure. Some also dislike the fact that arbitration, rather than a judicial proceeding, is the default procedure for determining a FRAND license. See commentary at Foss Patents and at PatLit in particular. Other coverage can be found at Essential Patents and at Patently-O.
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